Bancrofts, Murdoch reach tentative agreement
Rupert Murdoch's $5 billion bid for the Dow Jones Co.áwas unofficially accepted by the Bancroft family Tuesday.
The News Corp. offer was made public May 1. Since then, Murdoch and Dow Jones' controlling shareholders, the Bancroft family, have been sparring over the deal. Some members of the family opposed the offer, saying that Murdoch would use the Dow Jones-published Wall Street Journal to back his own business ventures. The matter of editorial independence also played a large part in the family's reticence.
A deciding factor brought up in Tuesday's meeting was the possibility of News Corp. covering the adviser fees that the Bancrofts have been accumulating since the offer was made. If they approved the deal, the family hoped they could persuade Murdoch to cover the fees, which the Journal has estimated to be close to $30 million.
The Journal reported that Bancroft members, who own 32 percent of the voting stock, or half of the total Bancroft share, agreed to the deal Tuesday afternoon. News Corp. scheduled a board meeting for 4pm Tuesday, and the Dow Jones board set up a meeting for that evening.
Advisers to News Corp. said it required family members with at least 30 percent of the total vote to commit to the deal to ensure the vote would top 50 percent in the actual ballot.
Opposition to the Murdoch deal remains, particularly with Dow Jones director Christopher Bancroft and former board member Jim Ottoway Jr. As late as Tuesday morning, Internet entrepreneur Brad Greenspan was trying to gain backers in an opposing bid.
Murdoch's offer values Dow Jones at $60 a share. It is worth a 67 percent premium to the Wall Street Journal publisher, which was trading at $36 before the offer became public.
Acquisition of The Wall Street Journal, along with Dow Jones' other news resources, such as Barron's and Dow Jones Newswires, aligns with Murdoch's television plans. News Corp. will launch a business news channel on Fox in October, and it will be looking to its ownership of Dow Jones as a source of credibility.
Television news channel CNBC has exclusive rights to Dow Jones' reporters and editors until 2012, but sources say Murdoch is willing to wait years for the payoff on his investment.
New York-based News Corp. is a global media company valued at $28 billion. Holdings include more than 100 newspapers, satellite broadcast operations, the Fox television network and MySpace.